Traders work on the floor of the New York Stock Exchange on February 29, 2024.
New York Stock Exchange
Stock futures were little changed Monday as investors looked to push stocks to record highs now that the Federal Reserve has signaled that interest rate cuts are coming.
Futures are linked to the S&P 500 Index. It rose by 0.1%, while Nasdaq 100 Futures It was flat. Dow Jones Industrial Average Futures It rose 44 points.
Stocks are headed higher after a strong week highlighted by Federal Reserve Chairman Jerome Powell’s comments that an interest rate cut is imminent. Wall Street had been eagerly awaiting the rate cut, especially in light of some worrying economic data that sparked a selloff in early August and raised investor concerns that higher borrowing costs could hurt the U.S. economy.
But stocks have since rebounded and are now hovering near all-time highs. Friday’s close for the benchmark S&P 500 put the broader market index less than 1% away from its record high set in mid-July. The recovery has extended to the broader market, with the Russell 2000 index of small companies adding 3% after Powell’s comments.
“Powell’s comments keep the market in a tailwind through the end of the year, making it difficult to see a retest of this month’s lows,” said David Russell, head of global market strategy at TradeStation.
Powell certainly didn’t indicate when or how much he might cut rates. However, traders remained broadly aligned in their expectations for a rate cut at the Fed’s September policy meeting, according to the CME Group’s FedWatch tool.
On the economic front, initial jobless claims are due out on Thursday at 8:30 a.m., followed by the July personal consumption expenditures reading on Friday.
